The US stock exchanges were closed in observance of a national day of mourning for George H.W. Bush. This is the first time the market closed for the death of a president since 2007 for former President Gerald Ford. Stock index futures will reopen Wednesday evening at 6 p.m. Eastern, as usual. Wall Street could use the break. Yesterday, each of the three major indices closed lower by more than 3%. It was the worst session for the Dow and the S&P 500 since October 10, and the worst for the Nasdaq since October 24. The rout that sent US stocks reeling also engulfed markets overseas.

The numerical decline in stocks on Tuesday is a bit scary, with the Dow lower by 799 points. However, the lost points tell only part of the story, as they have translated into smaller percentage declines over the years as the indices have gradually risen. The first move of more than 500 points for the Dow took place on Oct. 19, 1987, with a 508 point drop representing a 22.6% decline for the index. However, 500 points on Tuesday translated to just a 1.94% decline for the Dow, a percentage move that the index has experienced more than 2,000 times since 1896.

The Dow has moved lower by 1,000 points twice, with each occurrence taking place in 2018 and each translating to a more than 4% decline in the index. But even these quadruple-digit point moves do not register among the top historical percentage declines for the Dow. That title still goes to the session taking place on December 12, 1914, which saw a 23.52% change in the Dow with just a 16.8-point loss in the index. This century, the biggest percentage decline took place on October 15, 2008, which saw a 7.87% decline in the Dow on a 733-point loss. We could debate about whether we should consider actual point moves or percentage moves – the fact remains that investors lost a lot of money yesterday.

What spooked the markets yesterday? A combination of doubts about a US-China trade deal announced over the weekend at the G20 summit in Argentina plus the flattening of the yield curve. The yield curve hit its flattest level in more than a decade this week. A flattening yield curve is traditionally viewed as a sign of slowing economic growth, which could signal a recession is near. An inverted yield curve can lead to a recession – 80% of the rate hike cycles dating back to World War II have pushed the US economy into a recession – and is an indicator of economic slowdown, even if it does not result in recession.

The trade deal with China seems to be slipping into darkness before ever seeing the light of day. What looked earlier this week like a resolution to the costly automotive tariff war with China has proven to be little more than a presidential boast. Carmakers and car parts manufacturers on both sides of the Pacific were initially buoyed by the claim of an “incredible” trade deal emerging from the 2½ hour dinner meeting Trump held with his Chinese counterpart Xi Jinping on Saturday at the G-20 summit. Trump told reporters in Argentina that China agreed to reduce and remove tariffs on cars coming into China from the US Currently the tariff is 40%. But the White House has now backpedaled, acknowledging there was no deal in place to roll back automotive tariffs.

It is a hit to the auto industry, which shipped about 250,000 vehicles to China last year. Vehicle sales were expected to grow because demand for SUVs had risen there. BMW, the largest exporter of American-made vehicles, has been planning to boost output of utility vehicles from its Spartanburg, South Carolina, plant with the launch of its new flagship, X7 SUV — many of them bound for China. Volvo, meanwhile, had earmarked about half of the vehicles it will produce at its new Charleston, South Carolina, plant for export, many of those also bound for Chinese consumers. Volvo is reportedly considering shifting some production from Charleston to China, impacting production levels and hiring at the plant. Other automakers could follow. The auto industry, in particular, has been hard hit by the Chinese trade war and tariffs on imported aluminum and steel. The tariffs (which are still in place) will cost General Motors and Ford about $1 billion each. Lower exports to China will further strain their balance sheets.

Trump, meanwhile, last week signaled he is still itching to open up a third front in his global trade war, urging Congress to support what could be up to 25 percent tariffs on vehicles imported from other trade partners, such as Germany. Leaders of the European Union have signaled they would echo the response of China, saddling US-made vehicles with new tariffs in response.

The Securities Industry and Financial Markets Association (SIFMA), a financial-industry trade group, also recommended that fixed-income cash markets close, applying to securities including bonds and mortgage- and asset-backed securities. CME Group, which operates an exchange for options and futures, did not hold trading for interest-rate and futures and options products. However, electronic trading and trading for energy and commodity futures took place per the usual schedule. US stock-index futures were showing modest gains. Futures for the Dow Jones Industrial were up more than 100 points, those for the S&P 500 index were up 16 points to reach 2,718, while the Nasdaq-100 climbed 45 points.

Corporate earnings originally scheduled for release Wednesday have also been pushed back. H&R Block (HRB) will report results before market open on Thursday. Lululemon Athletica (LULU) will release its third-quarter financial results after market close on Thursday. American Eagle Outfitters (AEO) will report results on December 11.

Economic data previously scheduled for release on today will be moved to Thursday, including ADP’s report on national employment, the US Commerce Department’s quarterly services survey, the US Labor Department’s nonfarm productivity and cost data and the US Energy Information Administration’s weekly petroleum status report. The Institute for Supply Mangement will release its non-manufacturing survey tomorrow. The Federal Reserve did publish its Beige Book today. The Beige Book gathers observations from the 12 Fed districts to be used as a guide for policymakers at the upcoming FOMC policy meeting.

The Beige Book report was positive but did note headwinds. Consumer spending held steady, tourism kept pace, and tariffs didn’t derail manufacturing. Meanwhile, new home construction and existing home sales meanwhile tended to decline or hold steady, and lending volumes grew just modestly. Tariffs, meanwhile, have curbed the agricultural sector, as has excessive rainfall. Labor markets “tightened,” per the Fed, notably in the Chicago region. Most of the Federal Reserve’s 12 districts saw modest to moderate growth from mid-October through late November, but Dallas and Philadelphia noted slower growth, while St. Louis and Kansas City noted just slight growth.

This Friday, the Labor Department will release the non-farm payroll report for November. The economy has produced an average of 213,000 new jobs a month so far this year, topping the 182,000 average in 2017 and 195,000 in 2016. The US likely added 190,000 new jobs last month to keep the unemployment rate at a 49-year low of 3.7%. The tight labor market may finally be starting to push wages higher. The yearly increase in hourly pay broke through the 3% barrier in October (3.1%) for the first time since 2009. And wage gains in the most recent 12-month period could climb to 3.2% in November. It’s been a long time coming for American workers. Pay rose a mild 2% a year through most of an expansion that began in mid-2009, well below the 3% to 4% rates that typically prevail in good times. The problem is rising wages have historically been seen as a prelude to higher inflation. The threat of higher inflation has helped the Federal Reserve justify interest rate hikes this year, and possibly in two weeks and possibly in 2019. If wages keep rising toward the 4% mark, the Fed is likely to pursue a more aggressive course of rate hikes. And that spells trouble for home sales, the stock market and possibly the broader economy.

Tomorrow, OPEC will begin meeting in Vienna. In June, OPEC raised output to counter rising prices and the oncoming threat of Iran sanctions. Mission accomplished, and then some. A bad combination of underestimating how much oil Iran would still be able to sell, along with continued record output from the US, sent prices tumbling. November posted the biggest monthly drop in a decade. Now OPEC has to change its tune and ask for cuts, which won’t be easy as some members want – or need – to keep output up. There are several factors at play, including the recent assassination of journalist Jamal Hashoggi which implicates Saudio crown prince Muhammed bin Salman. Don’t forget Russia, Venezuela, and US shale producers. And one more factor – Iraq.

Iraq is OPEC’s biggest wildcard, and it doesn’t want production cuts. And it likely can’t cut. Revenue from selling oil accounts for nearly all of the war-torn nation’s available cash. Iraq needs the oil money perhaps more than any other OPEC member other than Venezuela. It is now producing about 4.6 million barrels of oil a day, making it OPEC’s second largest producer. An OPEC deal to cut production without Iraq on board would ring hollow. Plus, there is some chatter that Iraq could “pull at Qatar” and be the next to quit the cartel, because its goals simply may not align with the rest of the group.